Smells like sequester

Is the 2003 budget becoming a victim of political compromises?
The draft budget of the year 2003 is generating scandals again. The government was hoping to make a quick deal with the State Duma, but the Russian parliament became an iceberg for the major financial document of the country. Both the parliamentary majority and President Putin want the government to master the art of the impossible.

As PRAVDA.Ru has reported, the leaders of the centrist factions of the Russian State Duma attacked the basic paragraphs of the budget at the end of the past week. Prime Minister Mikhail Kasyanov invited the leaders of Duma’s centrist factions to a meeting. When the meeting was over, the parliamentarians were quite satisfied.

The government did its best to take account of all the wishes and requests before the draft budget was submitted to the Duma. As a result, the volume of the Gross Domestic Product in the draft budget was increased from 12 trillion, 980 billion rubles to 13 trillion, 50 billion rubles. Spending on roads was increased by 4.8 billion rubles, and 1.8 billion were added to the fund of the regional development. Agriculture gained 5.5 billion rubles, and another billion was assigned to the regions for pulling down dilapidated houses. The State Duma is thinking about the coming elections. That is why teachers, doctors, and other budget-related employees were given ten billion rubles for their paychecks. The result of the budgetary debate is as follows: revenues and spending were increased by 50 billion rubles. Isn’t this too much?

This is only the start. However, centrists are not lonely in the Duma. There are other deputies and factions. The communists have not said anything yet. The budgetary committee of the State Duma started the consideration of the government’s budget today.

President Putin added more trouble for the government and Ministry for Finances. Putin criticized the government for the poor funding of the navy. The head of the state promised that the Russian navy would be saved. Where is the money for it?

What about the monster flood in the south of Russia? It is not ruled out that the budget will have to be reconsidered due to the huge sum of financial help for the victims of the flood. Local budgets are always suffering from a lack of money. They cannot pay for gas and electricity, and teachers and doctors are starting their protests again.

In the meantime, the government is desperately looking for an opportunity to find some money. The amount of possible monetary loans on the market of eurobonds increased up to two billion dollars. It was planned to borrow $1.250 billion before. European and American experts don’t have any doubts that Russia will accumulate more debts in order to pay the current foreign debt.

The budget is becoming a big part of the game of political compromises. This happened in 1997-1998, but there was one man at that time who stood up and asked all the deputies to swallow their pride. This man was Alexander Chubais, but it was at the peak of his career back in those days. Will Vladimir Putin dare to do this now?

The Russian media must be tired of writing about the highest point of foreign debt payments. Minister for Finances Aleksey Kudrin stated during the past weekend that Russia would be lucky if it passed this point. What if it doesn’t?